Puerto Rico Cancels Whitefish Energy Contract to Rebuild Power Grid – New York Times

More than a month after Hurricane Maria struck Puerto Rico and ravaged its electrical grid, most of the island remains without power. Candles and flashlights serve as lighting, and for many, canned food has become a staple.

As the recovery plods forward, a small company from Montana that was awarded a contract of up to $300 million to rebuild part of the island’s electrical infrastructure has come under intense scrutiny.

The Federal Emergency Management Agency on Friday expressed “significant concerns” about how the company, Whitefish Energy, won the contract.

On Sunday, the future of the contract took yet another twist when Gov. Ricardo Rosselló said he was asking the board of the island’s power authority to “immediately” cancel its contract with Whitefish, which is based in the hometown of Interior Secretary Ryan Zinke. Later in the day, the power authority said it had done so.

Critics have raised questions about why the power authority opted not to request aid from mainland utilities after Hurricane Maria struck the territory. After natural disasters, power companies on the mainland often get help from other companies under mutual-aid agreements.

“There can be no distraction that alters the commitment to repair the power grid as quickly as possible,” Mr. Rosselló said in a statement on Sunday. “I have given instructions to immediately proceed with the necessary coordination with the states of Florida and New York, in order for brigades and equipment to arrive on the island.”

The governor said the decision to ask New York and Florida for help was being made because the Army Corps of Engineers had not managed to get the job done in the time frame initially outlined.

Representatives of Whitefish and the Army Corps of Engineers were not immediately available to comment on Sunday.

On Thursday, the House Committee on Natural Resources, which oversees Puerto Rican affairs, sent a letter to the Puerto Rico Electric Power Authority, known as Prepa, demanding all records connected to the contract.

That same day, the inspector general’s office at the Department of Homeland Security said it was also investigating, and Mr. Rosselló ordered an audit of the contract.

In a statement on Friday, FEMA said it had not confirmed whether prices listed in the contract between Whitefish and the power authority were reasonable.

In a copy of a contract circulating online, whose authenticity has not been verified, the power authority “represents and warrants that FEMA” approved the deal. But in its statement, FEMA said, “Any language in any contract between Prepa and Whitefish that states FEMA approved that contract is inaccurate.”

That contract cites the rates to be paid to Whitefish, including $188.07 to $440 an hour for the labor of its workers.

Whitefish said in a statement on Friday that it planned to cooperate with any information requests from lawmakers, federal officials “or other appropriate governmental bodies” and that it looked forward “to the facts coming to light.”

In an interview this month, Ricardo Ramos, the chief executive of Prepa, said he had agreed to a contract with Whitefish because the company did not insist on a down payment.

Other companies, wary of Prepa’s bankruptcy, had demanded hefty sums, he said. Prepa had also been in talks with another company, Power Secure.

Asked how a company as small as Whitefish, which had just two full-time employees, could take on such a big job, Mr. Ramos said, “Every company is small at some point in time.”

He added that the company had sent a proposal after Hurricane Irma and before Maria, as had other companies. He studied its brochure and was interested in its work in mountainous terrain.

“They told us about the assets, how many helicopters, how many crews,” he said. “They told us about their capability and we can increase — double, triple, quadruple — the size of the crews and we went ahead and mobilized them.”

Power companies traditionally engage power companies from other states for help immediately after emergencies. Mr. Ramos said he did not do so in this case because the companies were hesitant to commit until they were sure where Maria would make landfall. He didn’t do so afterward, he said, because by then the Army Corps of Engineers had been tasked with the job.

In an interview on Thursday, Mr. Ramos said he had not heard of Whitefish before.

“I heard of them once we received the proposal,” he said. “We checked them out on the internet. There was a list of projects that they had done in the past, including with the Department of Energy. They showed a lot of experience in using helicopters to build transmission lines. On paper, they did have the experience necessary.”

He added: “Tomorrow they start failing? Then I just remove them.”

The chief executive of Whitefish Energy, Andy Techmanski, said in an interview this month that the company got the contract because he was able to stay in communication with Prepa when other companies could not.

He flew to Puerto Rico before the deal was signed on a “leap of faith,” he said.

“It was more of a scenario we were able to maintain limited communication with Prepa throughout the hurricane where perhaps others were having difficulties,” he added. “We made a commitment to come here. We stand behind that commitment.”